Kroger and Albertsons have agreed to divest some businesses to C&S Wholesale Grocers as they aim to complete the previously announced merger.
As part of the approximately $1.9bn deal, C&S will acquire 413 stores, along with the QFC, Mariano’s and Carrs brand names.
Across 17 States and the District of Columbia, Kroger will also divest eight distribution centres, two offices and five private label brands, including Debi Lilly Design, Primo Taglio, Open Nature, ReadyMeals and Waterfront Bistro.
The retailer will retain and continue to operate all fuel centres and pharmacies associated with the divested stores.
The deal is subject to the fulfilment of customary closing conditions, including Federal Trade Commission (FTC) and other governmental clearance, as well as the completion of The Kroger-Albertsons merger.
In connection with securing FTC and other governmental clearance, C&S may be required to purchase up to an additional 237 stores in certain regions.
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C&S, a leader in wholesale grocery supply and supply chain solutions, caters to more than 7,500 independent supermarkets, retail chain stores and military bases.
Kroger chairman and CEO Rodney McMullen said: “Following the announcement of our proposed merger with Albertsons Cos., we embarked on a robust and thoughtful process to identify a well-capitalised buyer who will operate as a fierce competitor and ensure divested stores and their associates will continue serving their communities in the ways they do today. C&S achieves all these objectives.
“C&S is led by an experienced management team with an extensive background in food retail and distribution and has the financial strength to continue investing in associates and the business for the long run. Importantly in our agreement, C&S commits to honouring all collective bargaining agreements, which include industry-leading benefits, retaining frontline associates and further investing for growth.”
In October 2022, Kroger entered a definitive agreement to acquire Albertsons in a deal combining the two grocery store chains.
However, the proposed merger faced a private antitrust action filed on behalf of 25 consumers in the US in February this year.
In response, Kroger and Albertsons announced their plan to divest at least 250 stores to secure antitrust approval for their merger.
In its latest announcement, Kroger said the merger remains on track to close in early 2024.